Return To Opportunities List

Opportunities

Architecture Firm with Niche in Highrise Condos

Loyal and Well-Established Client Base!

CASH FLOW
$342,382

Specifications

  • Price
    $1,200,000

  • Revenue
    $876,102

  • Cash Flow
    $342,382

  • Location
    Toronto

  • Service Area
    Greater Toronto Area

  • Employees
    7; 1 owner/architect, 3 architects and 3 architectural technologists

  • Profit Margin
    29%

  • Reason for Sale
    Owner wants to build up the business with a partner or owner

  • Intangible Assets
    Loyal client base, well-established name, word-of-mouth referrals

This full-service architecture firm has a loyal and well-established client base consisting of developers, engineers, and general contractors! Having been around since 2000, this firm and its team of 7 including 4 architects, and 3 architectural technologists have culminated an excellent reputation in the Greater Toronto Area which has led them to a stark increase in sales in 2022, expecting to reach a projected revenue of $1.8M which is significantly better than even pre-pandemic numbers! Their team is highly educated and experienced in their field and offer full-service architecture work in the industrial sector, retail, mid to high-rise residential, interiors, and primarily they specialize in condominiums as this makes up 80% of their business. The current owner is an architect and was included in the previously mentioned staff, he is looking to stay on for 3-5 years so as to see his business continually grow, and is additionally interested in rolling 15% equity on the sale. His retention salary is accounted for in the shown cash flow.

 

New ownership would be expected to own architecture, engineering, or a large-scale real estate firm in order to better fit this particular business. Current ownership is planning to stay on and handle the majority of the architecture side of business, but feels that he has reached his potential in growing the business side of the firm and is looking for new ownership to expand on the foundation that he has created. He would plan on staying on as either a minority partner or principal holder. Growth opportunities for new ownership moving forward include expanding marketing tactics, expanding on current partnerships and excellent reputation, and expanding revenue focus to grow other types of projects which the business already has the capacity to handle.

 

Priced at $1,200,000, this is an incredible opportunity for a new owner to step in and focus on recruiting and business development, while partnering with the current owner to expand. Most clients are obtained through word-of-mouth referrals and are often repeat clients, proving this firm’s commitment to listening and working collaboratively with their clients throughout the projects. This partnership will result in more work being sought after and more projects brought into the fold, giving great potential for increased revenue and business expansion.

Business Highlights

  • Year Established: 2000
  • Location:  Toronto
  • Service Area:  Greater Toronto Area
  • Services: Full-service architecture firm, primarily specializing in condominiums (80%); industrial sector, retail, mid to high-rise residential, interiors
  • Clients: Developers, Engineers, General Contractors
  • Lease: 2,500 sq. ft. office
  • Reason for Selling: Owner wants to build up the business (will roll 15% equity if buyer allows)
  • Personnel: 7; 1 owner/architect + 3 Architects and 3 Architectural Technologists
  • Seller Training Period: 3-5 years
  • Growth Opportunities: Expand the business by working as a partnership and increasing number of projects
  • Current Owner’s Responsibilities: Design & Execute projects, Business Development

Financial Highlights

  • List Price: $960,000 CAD
  • 2021 Cash Flow: $255,673
  • 2018, 2019, 2021 Average Cash Flow: $274,380
  • A/R: $36,979

*amounts may vary

Cash Flow Analysis

Description of Financial StatementP&L StatementP&L StatementP&L StatementP&L StatementNotes
2021202020192018
GROSS SALES$876,102$521,340$1,135,674$1,013,304
Net Income Shown on Financial Statement$178,223$29,043$341,944$244,989
ADDBACKS
Compensation to Owner$140,000$95,000$50,000$27,000Would like to stay on board
11% Tax on total W2 Salaries$0$10,450$5,500$2,970
Depreciation$0$0$23,620$17,208
Life Insurance$5,400$5,400$5,400$5,400$450/month for personal life insurance
Contributions/Donations$0$0$0$0Non-onward going expense
Interest$118$58$0$0
Salary$-100,000$-100,000$-100,000$-100,000To keep owner in place
Meals & Entertainment$5,757$6,155$0$0
Computer Expenses$8,000$0$0$0Purchase new computers for staff - non onward-going
Dues/Subscriptions$1,600$0$0$0Upgraded software packages - non onward-going
Auto Expenses$16,575$17,398$19,815$23,622
TOTAL ADDBACKS$77,450$34,461$4,335$-23,800
Seller's Cash Flow = Total Addbacks + Net Income$255,673$63,504$346,279$221,189
Profit Margin29.18 %12.18 %30.49 %21.83 %

2020 was an anomaly year due to projects being put on hold. Around March 2020, two of their scheduled projects for the year were cancelled due to the unpredictable financial forecast. This forced them to downsize for a short period.

Clients

  • Developers
  • Engineers
  • General Contractors

Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.

Services

  • Residential (primarily condominiums)
  • Commercial
  • Industrial
  • Institutional
  • Interiors

Personnel

  • 1 owner
  • 2 architects
  • 2 architectural draftsmen
  • 1 intern

Growth Opportunities

  • Expand the business by working as a partnership and increasing the number of projects

Valuation Details


Funding Example

Purchase Price:

$1,200,000

$
%
OR
$
%
OR
$
Years
%

Bank Loan Needed: $

Years
%
$
$
$
$
$

Funding Details

Business:

Offer Price: $

% Buyer Cash Down at Closing: $

% Seller Carry Back via Promissory Note: $

year term at a rate of %

% of Purchase Price secured by Buyer and Seller

Total Bank Loan Need: $

% of Purchase Price

Desired Loan Type:

Desired Bank Terms: year term at a rate of %

Total Business Assets, Inventory, and A/R: $

Total Undercollateralized Loan: $

Loan Payments

Monthly Payment to Bank: $
Yearly Payment to Bank: $
Monthly Payment to Seller: $
Yearly Payment to Seller: $
Total Monthly Debt Service: $
Total Yearly Debt Service: $

Conclusions

Fixed Charge Coverage Ratio

The bank will require a minimum ratio of 1.5 to be lendable.

Cash Flow:
2018, 2019, 2021, 2022 Average Cash Flow
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
2018, 2019, 2021, 2022 Average Cash Flow
$
Annual Debt Service: -$
NOI:

Buyer's Return on Investment (ROI)

The rate of return on the Buyer's down payment.

Down Payment: $
NOI:
ROI: %

Attachments

Document Title / Description

This folder is empty.

Access to this Deal Room is restricted

Would you like to access the deal room?

Yes, please

Interested in
this business?

Complete the following information to sign an NDA and see more details!

Already have an account? Log in here.

Click to download NDA form

Print, sign and send to:

210 N 78th St. 2nd Floor
Omaha, NE 68114

Or fax to:

f 402.939.0857

Thinking of Selling?
When selecting an M&A firm, please use the following Scorecard: click here for our M&A Scorecard

The Firm makes no warranties or representation in consideration to the information provided above. All communication regarding this business must occur directly with The Firm Advisors, LLC. The Firm is not a real estate brokerage and does not sell real estate. The Firm solely advises on exit strategy.